GMH Medical Supply Vendors Paid, Orders Placed
Vendors lift credit hold; Hospital on its way to fiscal health
Press Update: February 28, 2011
Guam Memorial Hospital can now order more medical supplies after it began addressing its financial problems this week. Payments overdue to vendors (up to and exceeding 120 days past due) were made this week, allowing GMH to order supplies like reagents, catheters, pharmaceuticals and surgical supplies.
“The professionals here at GMH and the patients and stakeholders all asked that we take immediate action on the supply shortages,” Interim Hospital Administrator Rey Vega said. “People were really worried. The Governor made it very clear that a hospital without medicine is just unacceptable. This had to be our top priority. We’re very proud of our business office and medical and nursing staffs for putting this together.”
GMH made a total of $5.2 million in vendor payments as of today. More than $3.9 million of that amount was paid from proceeds of the recent $12 million loan. The rest was paid from GMH revenues, which the GMH chief financial officer is managing.
Most of the medical vendors paid had GMH on credit hold. This meant the hospital could not order more critical supplies from these companies. The CFO has since communicated with these vendors, laying out payment plans to assure these vendors the hospital will make good on its obligations. Consequently, the vendors released GMH from credit hold. The hospital now can order supplies.
“This is all a matter of sound cash management and knowing what the priorities are,” GMH Chief Financial Officer Siva Karuppan said. “Sometimes all it takes is a phone call and a good plan. We’re going to win back the confidence of these vendors. We’re going to keep the priority on patient care.”
This is welcome news for the medical professionals at GMH, who were running extremely low on reagents. The hospital also was running low on catheters and surgical supplies. Other examples of supplies these vendors provide include lab supplies, pharmaceutical and cardiac supplies.
“The doctors and nurses get very worried when supplies run low, and rightfully so,” Dr. Larry Lizama said. Dr. Lizama is the GMH Medical Director. “They shouldn’t have to worry about supplies. They should be able to come to work with adequate supplies at the hospital so they can focus all their efforts on saving and improving patient lives.”
It should be noted that, for many of these vendors, the hospital only partially paid its debt. This is part of Karuppan’s cash management of the hospital and payment plan agreements with the vendors.
More vendor payments are expected. Vega intends to reserve $1 million as a contingency for emergencies, which may arise.
